Pacifica budget cuts delayed

By |August 7, 2012

Arlene Engelhardt, right, at a 2010 protest of program changes at KPFA (Photo: kpfaworker9415 via YouTube).

Leaders of the Pacifica Foundation will seek a new executive director for the radio network, and are asking stations for financial information before ordering across-the-board cuts pushed by current Executive Director Arlene Engelhardt.

Arlene Engelhardt, right, at a 2010 protest of program changes at KPFA (Photo: kpfaworker9415 via YouTube).

The Pacifica National Board voted July 22 not to renew the contracts of Engelhardt and of Chief Financial Officer LaVarn Williams, both of which expire Nov. 30. Board Chair Summer Reese declined to disclose the reasons behind the majority vote, on advice of counsel. Engelhardt and Williams were invited to apply for new terms as a search to fill the posts gets underway.

In a separate but related action, the board delayed budget cuts totaling $1 million at Pacifica’s five stations. Engelhardt had ordered the cuts after an auditor’s report questioned the network’s financial viability (Current, July 9).

The board ordered the stations’ general managers July 23 to assess budgets and submit plans to deal with any projected shortfalls.

The board needs the information and “full engagement by the general managers” to make informed decisions, Reese said. Pacifica’s unionized employees have been notified that any anticipated layoffs as a result of the budget cuts have been put on hold until the situation is sorted out, she said. A handful of layoffs that took place prior to the board meeting, including the layoff of the business manager at New York’s WBAI, will not be rescinded, however.

Station reports, due July 30, were still coming in as of Current’s deadline. The findings are to be discussed at the next board meeting, Aug. 9, Reese said.

The network needs to address declining listening to stations and onerous real-estate contracts held by the stations, some of which are unsustainable, Reese said. Mounting debts to program providers also need to be resolved, she said.

Engelhardt’s cuts could still be enacted after stations submit their plans, but supporters of the board’s vote hope they won’t be. The board action “requires the local stations to take responsibility for their own problems” instead of submitting to across-the-board cuts, said Margy Wilkinson, chair of the Local Station Board at KPFA, Pacifica’s station in Berkeley, Calif.

“We need a plan, and the place to start with a plan is the place where they put the radio on the air,” she said. “And that’s the local station,” she added.

“One of the problems, from my point of view, is there’s not enough in-depth discussion about exactly what’s in bad shape and why,” said PNB member and former Pacifica staffer Dan Siegel, who put forth the motion requesting the station reports. Four of Pacifica’s stations — KPFA, Los Angeles’s KPFK, KPFT in Houston and Washington, D.C.’s WPFW — appear to be keeping to their approved fiscal year 2012 budgets, Siegel said.

“I don’t feel the case has been made that stations . . . living within their budgets, with two months left in the fiscal year, should be required to make further budget cuts above and beyond what’s been approved,” he said.

Siegel singled out WBAI, which for years has struggled with expenses for offices and tower rental, as contributing to Pacifica’s financial dire straits. He introduced a motion that has yet to be voted on to force WBAI to move within 60 days.

He also criticized the national office, which he said receives 20 percent of the stations’ income, for running up a debt of what he said was $2 million. Democracy Now!, which airs on Pacifica’s stations, is owed $1.5 million alone, he said. The rest is owed to vendors, including lawyers, and Free Speech Radio News, another news program. The board had not approved delaying payments to Democracy Now!, Siegel said.

Asked why the board decided to take action now and did not intervene earlier, Siegel cited several reasons, including political division, which he said leads to tough questions being painted as “an attack on the other side.” Additionally, he said, “I think the people who have been in charge of our finances have been very opaque in terms of clarifying the challenges and the problems. And as a self-criticism, I think some of us on the other side have not been as assertive as we should have been about getting to the heart of this.”

The auditor’s report, he added, “seems to have had a sobering effect on a majority of members of the board,” erasing some of the previous political divide.

Williams declined to comment on the board action regarding her contract, and Engelhardt did not respond to requests for comment.

Related Links

Pacifica historian and Radio Survivor blogger Matthew Lasar, who has written two books on the network, floated a proposal on Aug. 5 to dismantle the Pacifica Foundation and transfer its stations’ FCC licenses to their local boards.

Also on Aug. 5, former Pacifica Foundation board member Carol Spooner penned an open letter to the network’s National Board calling for an “amicable divorce” at Pacifica and a “signal swap” at its priciest station, WBAI.

Radio advocate blog SaveKPFA has its own stirring account of the July PNB meeting, with a recap of community reactions.

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I have been following the recent events of the Pacifica radio network with great interest and even greater concern — even sadness. I am reading far too much misinformation — a thousand sparks, a million splinters, far too much “me-me-me,” no “we.”

I was the Executive Director of Pacifica before the latest appointee, Summer Reese.

6 thoughts on “Pacifica budget cuts delayed”

There are a couple of alternatives aside from those by Siegel and Spooner, but the crux of the problem is that Pacifica has people more interested in promoting their own political agenda than keeping the network alive.

Everyone wants the glory of “saving Pacifica” so badly that they will sabotage anyone who might take that accolade from them…and so keep the division going, especially in dividing KPFA and WBAI to prevent them from working together.

As stated in the article, there are Pacifica stations that are doing just fine (on-air and financially) all on their own! However, Pacifica is very quick to point the finger at the stations for the foundation’s financial woes, but they should do so while looking in a mirror. The biggest question to Pacifica should be, “Where did all the money go?” The public Profit and Loss statements show that, since the start of the fiscal year in October 2011, the foundation has received at least $900,000 in levy money . Where did the money go? Why isn’t “Democracy Now” being paid? Or the other creditor for that matter.

Pacifica’s audited financial statements for the years ending September 2010 and 2011 have finally been released. You can download the reports at Pacifica’s website.
The independent auditor raises “substantial doubt” that Pacifica can
continue as a “going concern” without making changes in the way it
operates.
The audit shows that of the network’s five stations, KPFA is the wealthiest, with net assets of $3.2 million. KPFKin Los Angeles is the only other station in the black. The rest are underwater. Worst of all is WBAI in New York, which has been operating under Pacifica-installed management for nearly four years. WBAI has a current net worth of NEGATIVE $3.3 million — with a deficit of $750,000 in 2011 alone.
You can also see from these audits that Pacifica’s National Office raises very little of its own funds. The lion’s share of Pacifica’s budget — $2,001,298 – comes from imposing a “levy” on the 5 stations (KPFA, KPFK, KPFT, WPFW and WBAI), of which KPFA pays roughly one quarter.
Where’d Pacifica’s $2 million go? The National Office doesn’t produce anyprogramming of its own, but it carries personnel costs of about $1.1 million — mostly in management-level salaries. And it’s been spending increasing amounts on “legal fees.” In 2010, legal fees came to $328,433. In 2011, they grew to an astonishing $538,417. Some
of it has been spent on expensive lawyers fighting legal actions
sparked by Pacifica’s heavy-handed tactics at its member stations. In
addition, SaveKPFA’s review of legal bills reveals that Pacifica has paid attorneys up to $500 per hour to
come up with legal strategies for obstructing the KPFA recall election
currently underway, and blocking dissident board members’ legal right
to inspect records (such as legal bills).
Since 1999, the costs of supporting Pacifica’s national bureaucracy has grown from 9% to 20% of the network’s total income.
To give some perspective, the National Office’s budget is twice the
size of either KPFT or WPFW, and it’s nearly the same size as each of
the other three stations (KPFA, KPFK and WBAI). Pacifica was meant to
be a coordinating body to provide support and reduce costs, but it has
become the opposite of that. It produces no radio programs, but spends
huge sums on executive salaries and costly, unproductive board
meetings. KPFA could operate much more easily if it did not have to pay
20% of its listener contributions to Pacifica.

With 22 members of the PNB and at least monthly meetings(sometimes two a month) held all over the nation that drone on and on at a cost of who knows how much…it’s no wonder Pacifica is in trouble and leaning hard on its flagship stations….if this 22-seat board had to raise $25K each…the board would be smaller..the meetings would be held quarterly (so true work could be done) and there would be less of a struggle, since “everyone would be in the same boat”

“The
board action “requires the local stations to take responsibility for their own
problems” instead of submitting to across-the-board cuts, said Margy
Wilkinson.””

“”…Los
Angeles’s KPFK… — appear[s] to be keeping to their approved fiscal year 2012
budgets,” Siegel said. “I don’t
feel the case has been made that stations . . . living within their budgets,
with two months left in the fiscal year, should be required to make further
budget cuts… ,” he said.”

Unfortunately,
both Ms. Wilkinson and Mr. Siegel are misinformed about KPFK. KPFK did have
some profit last year — but only because they went 9 days over the 80 budgeted
fund drive days. This year, KPFK’s listener revenue has been far below budget,
expenses higher — and thus management extended the August drive by 5 days to raise enough
cash to get through the fiscal year and limp to… the next fund drive. Combined with the other extended fund drive
days this year, KPFK will have had 93 drive days this year — 4 days more than last
year. 2010 and 2009 had 78 days of fund
drive; 2008 had 47; 2002 had 36. To say KPFK is “living within its
budget” appears to be a term of art from Mr. Siegal that is not recognized
by the accounting profession or anyone with common sense. Whether it’s only extensive fund drives or
the regular programming, KPFK is not serving the listeners, as the declining
listenership will attest with the accompanying decline of listener revenue. The
plan was to start the 2013 budget at 92 fund drive days. As Treasurer of KPFK, it does not appear that
management at the local level is taking “responsibility for their own
problems” by simply increasing fund drive days to cover increased expenses
and lower listenership. It’s a death
spiral and I look forward to new management at the national level to work with
the local stations to help make corrections.

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